Australia’s labour market expected to ‘loosen up’ in 2024

While still tight, Australian labour market conditions eased throughout 2023. This is reportedly predicted to continue into 2024.

The contemporary labour market is a slowly developing landscape, consistent with a more challenging economic environment.

Although still tight, imbalances between labour demand and supply – highlighted by a falling number of job vacancies and record population growth – have gradually eased. This is expected to continue in 2024.

A report by Indeed focused on the current state of the labour market and produced a number of key points regarding the potential outlook going into 2024.

Skills shortages are a well-known issue, but the report stated that Australia’s population growth somewhat combated these shortages. This growth, however, is expected to return to historical norms in 2024.

Job postings in every occupational category fell in 2023, with figures down 26.3 per cent from the start of the year. That steady decline is expected to continue throughout 2024 to some degree. That being said, there continue to be a lot of jobs still available across the country, with the job postings statistics showing that it is still 84 per cent higher than the pre-pandemic baseline.

A key finding of the report was the impact that cost-of-living pressures are having, forcing Australian workers to find more hours. Unless workers have received a promotion or changed jobs, there is a high chance that their salary today buys a lot less than it used to.

The data shows that Australian wages have risen 4 per cent over the past year, the highest level since the March quarter in 2009, but still short of the 5.3 per cent in consumer prices over that same time period. Although the inflation rate is down from its peak of 7.8 per cent in December 2022, it’s still elevated to the point that it’s disrupting Australian workers and their economic situation.

Adjusted for inflation, Australian wages are currently at levels last seen 13 years ago, having declined 1.2 per cent over the past year and 7 per cent from their peak. Thankfully, inflation-adjusted wages have started to rise, and they should increase further over the course of 2024.

However, the damage caused by Australia’s cost-of-living crisis has been so large that a full recovery for Australians is projected to take an extended period, nearly five to 10 years. Certainly not a quick-fix situation.

Some people have responded to cost-of-living pressures by working more than one job. Around 6.6 per cent of Australian workers had two or more jobs in the September 2023 quarter, according to the Australian Bureau of Statistics, well above the historical pre-pandemic range of 5 to 6 per cent.

The statistics also highlight some of the gender differences. The share of workers with multiple jobs is much higher among women (7.9 per cent of female workers) than for men (5.6 per cent). Such work arrangements are most common in arts and recreation (9.1 per cent of arts and recreation workers), administrative and support services (8.8 per cent) and agriculture (8.4 per cent).

Although the market is set to somewhat loosen in specific areas, many Australians will still be reeling from the impacts of pressures like the cost-of-living crisis. So, although this is good news, in the grand scheme, it’s not a “get-out-of-jail-free” card for many Australians and their financial pressures.